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Q1 Results: HDFC Life Insurance’s New Business Margin Grows

HDFC Standard Life Insurance Company Ltd. reported the highest new business margin among listed private peers on strong performance of its protection products that ensure income to a policyholder’s family in the event of death or illness due to a certain type of adversity.

The new business margin, which is a measure of its profitability, expanded 370 basis points to 24.2 percent year-on-year in the April to June quarter. (100 basis points = one percentage point).

“The real jump was on the protection side of the business,” said Amitabh Chaudhry, managing director and chief executive officer at India’s largest insurer by market value. “We want to increase our protection share as much as possible as that is good for us and good for our customers.”

The non-participating protection business share increased to 18.2 percent in the quarter ended June 30, compared with 11.1 percent of annualised premium equivalent in the year-ago period.

“On the group side of business we did extremely well,” Chaudhry said. The company’s group credit protect product grew over 55 percent year-on-year, he said.

More than a quarter of new business came from the group protection portfolio, mainly driven by sales of credit protect policy—which ensures repayment of credit if the borrower dies. The individual segment, at 2 percent of the total new business premium, was led by sales through digital channels.